Thursday 23 August 2012 09.19 EDT
First published on Thursday 23 August 2012 09.19 EDT

The excitement generated by the London Olympics failed to trigger a spending spree on the high street, according to Britain's leading business organisation.

In its monthly health check of consumer spending, the CBI said retailers' hopes for a modest boost from the Games has been dashed.

It also warned that the climate would remain tough for shops and stores over the coming months, with jobs and investment likely to be cut.

Judith McKenna, chair of the CBI distributive trades panel and Asda's chief operating officer, said: "Although this summer's events created a mood of celebration across the nation, these figures would suggest this positivity did not extend to the high street."

Anecdotal evidence had suggested an Olympics feelgood factor among shoppers but the CBI's distributive trades survey – conducted in the first two weeks of August when the Games were taking place – found no such impact.

Of those retailers questioned, 27% said sales were higher in August than they had been in a year, while 31% said they were lower. The rounded balance of -3 points was weaker than the +3 points expected in last month's survey.

The CBI reported an easing of shop price inflation to its lowest level in almost three years as retailers sought to attract consumers with bargain offers.

Tougher business conditions led to a fall in the number of people employed in retail in the latest quarter, with a further decline expected over the coming month. Business sentiment dropped to its lowest level since the depths of the recession in early 2009, prompting retailers to mothball investment plans.